Price. It's something we all think about and something we all think we know, but how do we actually know what a "good" price is?
In a lot of ways, price is one of the main factors that determine whether a particular property is viable as an investment. Of course, there are a lot of other factors that come into the equation, but price is right up there with the location as the most important thing to consider.
As a result, people who are looking to invest often consider themselves experts in the field of pricing because they know what other listings are going for and what they think they can expect.
This being said a price that makes sense for one investor might make absolutely no sense to another investor. Why?
Well, different investors have different strategies and ideas based on what their property investment goals are. Initial purchase price is more important for some investors than others.
For instance if you’re a property trader that is looking for short-term gains in a rising market you are heavily reliant on a below-market price so you can turn a profit within a matter of a year or sometimes less. . Buying at a significant discount in a low capital gain area can also work well for this type of investor as you can create equity at the time of purchase making capital gain less important. Yield is also not so important in this case.
Whereas, on the other hand, if you are a long-term investor who plans to hold the investment for 10+ years in order to build wealth you will be less worried about short-term discounts and should be more interested in the long term capital growth prospects and the yield.
This falls back in line with our philosophy mentioned above that price is subjective and what makes sense for one person will not necessarily make sense for someone else.
At The Property Factory we help all types of property investors make the right property decisions based on their own personal circumstances and property goals. We have a large stock list of properties that suit both types of investors.
Talk to one of our team to learn more about the property options we have for you.